Atlas Dropped: The Working Class and Its Critics

by Joseph Grosso / September 21st, 2017

The New York Times Business Page recently featured a front page article about the annual conference In Jackson Hole, Wyoming hosted by the Federal Reserve Bank of Kansas City. It contained this interesting opening:

In the decade since the financial crisis economic policymakers, professors and protestors have gathered here every August to argue about the best ways to return to faster economic growth. This year, they gave up…instead focused mostly on making sure things don’t get any worse.

Fed chairwoman Janet Yellen spoke about the risk of further deregulation while Mario Draghi, head of the European Central Bank, spoke against protectionism. The tepid tone of the conference, of course, was the opposite of President Trump’s boisterousness tweets about the current economic reality, most prominently on July 2nd when Trump tweeted ‘Stock Market at all-time high, unemployment at lowest level in years (wages will start going up) and our base has never been stronger!’ Not to be undone, July 31st saw Trump tweet ‘Highest Stock Market EVER, best economic numbers in years, unemployment lowest in 17 years, wages rising, border secure, S.C.: No WH chaos’.

For certain Trump isn’t the first president to hang his hat on the Dow Jones. Barack Obama for one certainly wasn’t above it. However, as Michelle Styczynski recently explained in Jacobin, a rising stock market has little to no effect on the wages of the hourly workers who make up almost 60 percent of the workforce. Before 1980, real wages grew at an average of two and a half cents ($0.0025) per month while the S&P grew on average 0.53 points per month. After 1980 wages grow by an average rate of 0.7 cents ($0.007) per month – a 71 percent drop. Meanwhile the S&P has risen to an average growth rate of 4 points per month for an increase of 660 percent. In other words it’s been a long time since stock market growth correlated to higher wages for the working class.

As for the rest of the ‘base’ as Trump refers to it is plagued by the same longstanding trends Trump incoherently campaigned on. The top 1 percent continues to swallow up the lion’s share of growth. From 2009-2012 the one percent captured over 90 percent of economic gains. That number has declined since but from 2013-2015 the one percent still grabbed about half of growth. Productivity has stalled. The economy has yet to even recover the output it was on pace to produce prior to the Great Recession.

In 1967 95 percent of ‘prime age’ men (ages 25-54) worked. Today more than 15 percent aren’t working with some localities having fewer than 70 percent of men without a college education unemployed or out of the workforce entirely. The percentage of underemployed Americans is now at 8.6 percent. Paradoxically 7.6 million people currently work more than one job, the highest in two decades. A study by economists Lawrence F. Katz and Alan B. Krueger showed that nearly 95 percent of jobs created during the Obama Era were temporary, part-time, or contractual (i.e. of the mythical ‘gig’ variety).

As has been the case since the mid-1970s Americans continue to make up for stagnant wages by using credit to finance the middle-class life. Just prior to the last recession household debt in the U.S. hit $12.68 trillion. It now stands at $12.7. Given the economy is larger now than it was a decade ago today’s total household debt is equivalent to 67 percent of the economy as opposed to the 85 percent back at the 2008 peak. The nature of the debt has shifted. Americans owe less on their homes and credit cards and more on student and car loans, the latter being a bare necessity in most places in the country, while the former is the declared ticket to prosperity. While this debt may be more sustainable in the short-term it probably has led to a drag on demand. Personal-spending growth has averaged only 2.4 percent since the recession ended, less than previous expansions.

Much ink has been spilled in recent times lamenting Americans’ new lack of mobility. According to the Census Bureau about 10 percent of Americans moved in the past year, down from the 1950s through the early 1980s when more than 20 percent of the population moved. Tyler Cowen laments in his book The Complacent Class: The Self Defeating Quest for the American Dream that the interstate migration rate has fallen 51 percent below the average rate from 1948-1971. Kevin Williamson of National Review surely took the prize for this last year, writing about the plight of the white working class:

There is more to life in the 21st century than wallboard and cheap sentimentality about how the Man closed the factories down. The truth about these dysfunctional, downscale communities is that they deserve to die. Economically, they are negative assets. Morally, they are indefensible…The white American underclass is in thrall to a vicious, selfish culture whose main products are misery and used heroin needles. Donald Trump’s speeches make them feel good. So does OxyContin. What they need isn’t analgesics, literal or political. They need real opportunity, which means that they need real change, which means that they need U-Haul.

Trump himself got into the act recently telling the Wall Street Journal “people are going to have to start moving.” Leaving aside questions about family and community, not to mention issues of vastly uneven development, this despair about mobility and labor flexibility seems to run into another longstanding issue. For well over half a century it’s been government policy to favor homeownership over renters, suburban sprawl over cities. Since the 1940s 90 percent of new housing has been in low density areas. If the impetus for this was the severe housing shortage in the aftermath of World War II, the adjoining motivation was the incubating and reinforcement of a conservative status quo.

A 1946 Fortune survey, citied by Rosalyn Baxandell and Elizabeth Ewan in In Picture Windows: How the Suburbs Happened, revealed:

The U.S. people are strikingly in favor of positive government action to end the severe housing shortage. A majority of those with opinions want the government to embark on a large scale building program, and that more people, particularly the young, veterans, the poor, and those living in large cities, and especially North Atlantic States; i.e. most people preferred renting an apartment to owning a house.

Unfortunately such a solution wouldn’t have made big money for the master builders and the bank and loan associations. The automobile industry and highway lobby had same understanding. While the suburbanization of the country largely solved the housing shortage and fulfilled the mythology of ‘homeownership’ (actually mortgage holding) and picket fences, in the long run it has contributed to a less fluid workforce as many are now tied to their mortgages or property. It’s also a fact that the cities where the movers are supposed to head have astronomical housing costs and growing homeless populations.

Along with the new lack of mobility, the other despair of working class critics is the state of the family. Obviously the decline of the nuclear family has been red meat for conservatives for decades. However, now the consensus is broader. Political rhetoric may require musings about “the family”, but the true subject of derision is the working class family, most especially the great increase in out of wedlock births. For those with college degrees the years since 1980 haven’t seen such an increase (the divorce rate overall has declined from its 1980 peak with a steeper decline for the college educated. Currently it’s at its lowest level in 40 years). For the other two-thirds of the population the increase has been substantial. According to data from the Center for Disease Control and Prevention, 2015 was the eighth straight year 40 percent of births in the U.S. were to unmarried mothers, the great majority of these births to working class children. While acknowledging the causes of this are complex, critics put much of their emphasis on culture. Amy Wax, professor at the University of Pennsylvania Law School, recently found herself at the center of a storm for an op-ed she coauthored for Philly.com titled “Paying the price for breakdown of the country’s bourgeois culture”. Thirty three of her colleagues at the University signed a letter condemning Wax’s claims.

Wax writes of a late 1960s cultural flip that “encouraged an antiauthoritarian, adolescent, wish-fulfillment ideal- sex, drugs, and rock-and-roll- that was unworthy of, and unworkable for, a mature, prosperous adult society”. The op-ed goes on to say:

All cultures are not equal. Or at least they are not equal in preparing people to be productive in an advanced economy. The culture of the Plains Indians was designed for nomadic hunters, but is not suited to a First World, 21st-century environment. Nor are the single-parent, antisocial habits, prevalent among some working-class whites; the anti-“acting white” rap culture of inner-city blacks; the anti-assimilation ideas gaining ground among some Hispanic immigrants. These cultural orientations are not only incompatible with what an advanced free-market economy and a viable democracy require, they are also destructive of a sense of solidarity and reciprocity among Americans. If the bourgeois cultural script — which the upper-middle class still largely observes but now hesitates to preach — cannot be widely reinstated, things are likely to get worse for us all…But restoring the hegemony of the bourgeois culture- the academics, media, and Hollywood- to relinquish multicultural grievance polemics and the preening pretense of defending the downtrodden. Instead of bashing the bourgeois culture, they should return to the 1950s posture of celebrating it.

Absent that sentiment is any economic analysis of the beloved 1950s, which for all the racism and McCarthyism, was a time of economic growth, rising wages, and strong unions- perhaps what many of those working class voters who fell for the charms of ‘Make America Great Again’ had in mind since these things have been gone for decades.

Writing in the New York Times back in 2014, Isabel Sawhill, of the Brookings Institute and author of Generation Unbound: Drifting into Sex and Parenthood without Marriage, acknowledged the need for educational and job opportunities, and correctly pointed to the need for greater access to quality birth control, but says:

But government alone can’t solve this problem. Younger people must begin to take greater responsibility for their choices…Well-functioning democracies are built on the premise that government has an obligation to promote the general welfare. But so do citizens. More support for those drifting is in order, but less drifting is also essential.

The emphasis on culture leaves one with an obvious question: if destructive cultural influences, such as Hollywood and academics, are persuasive then why is much of their seductive power only taking hold over certain segments of the population whom it just so happens have been the same segments that have dealt with deindustrialization, stagnant wages, drug abuse epidemics and, in the case of the black working class, taking the brunt of draconian anti-drug laws and crime bills? More than half of all black children born to less educated parents in 1990 experienced parental imprisonment. It calls to mind what Oscar Wilde placed into the mouth of Algeron in The Importance of Being Earnest: “Really, if the lower orders don’t set us a good example, what on earth is the use of them.”

One of the sharper points Andrew Cherlin makes in his Labor’s Love Lost: The Rise and Fall of the Working Class Family in America is that the much romanticized period from the late 1940s through the 1960s, the period where still much of our cultural and economic expectations derive from, is a historical anomaly. And as Cherlin points out, the fall in marriages has been seen before:

The marriage gap we see in the New Gilded Age today is similar to the gap during the Old Gilded Age of the late 1800s. Sharp inequalities in income and in marriage characterize both eras. …In both eras, men in professional, managerial, or technical positions were most likely to marry, and the probability of marriage dropped substantially toward the bottom of the occupational hierarchy.

The Great Depression saw the same trends. Birth rates fell sharply in the 1930s. According to a 1940 survey (cited Robert D. Putnam’s Our Kids: The American Dream in Crisis), 1.5 million married women were deserted by their husbands and as result more than 200,000 vagrant children were said to be wandering the country. Cultural mores were certainly different 125 years ago but as both the original Gilded Age and the present day show, the saviors of the traditional family, as well as single parents, aren’t pious harangues about moral decline or odes to personal determination but good paying jobs. Good paying jobs are what American capitalism has been unable to provide since the 1970s. For all Trump’s bluster, it’s always been obvious that a working-class populism wasn’t in the works. The Democrats are too weak and in the thrall of big money ‘centrism’ that emphasizes cultural issues above all else, as if things like gun violence and immigration are independent of economics. The beauty of culture for those who wield power is that when an issue becomes ‘cultural’ it also becomes unsolvable The endlessly analyzed “rural-urban” divide becomes a matter of who goes to church, owns guns, or drinks craft beers and not on the overall economic stagnation that affects so many rural and urban areas alike. Without a serious movement against unchained capital one can expect that divide to grow even larger and the underlying economic trends to continue to stir bitterness and conflict.